Agency workers

There are a number of reasons behind this: -

• The Taxes Acts require an agency to deduct tax under PAYE from payments made to you but in the true meaning of the word “employed” you are not an employee of the agency. It is simply that the agency has acted as a “middleman” between you and the end user. This legislation was introduced around 1980 and creates what HMRC refer to as a “statutory fiction”

• In the case of an agency each engagement is probably short-term and self-contained. HMRC will argue that where you are with an agency for some time you will have a series of casual engagements rather than one period of employment where you move from site to site.

• With an agency the “employee” is not under any obligation to accept any assignments offered and equally the agency is not under any obligation to offer any assignments to the “employee”. HMRC will argue that the lack of “mutuality of obligation” adds to their argument that the travel expense is not due.

See, however, “Umbrella Companies” and compare with “Running your own Company”